Wisdom and steady hands keep hospitals healthy

By Jennifer Salcido PBN Staff Writer

Change seems to be the only constant in the health care industry today. Every resident of that ecosystem – from patients to pharmacists to physicians to insurers – was managing shifting landscapes well before the rollout of the Affordable Care Act. Now, the pace of change is accelerating.

Wisdom and steady hands keep hospitals healthy

KEEPING AN EVEN KEEL IN STRONG SEAS: Care New England CFO John “Jack” Sutherland III has excelled at managing tremendous upheaval in the health care environment. One of his tools is consistent communication; here he speaks with Alyssa Boss, Care New England senior VP and general counsel.

Change seems to be the only constant in the health care industry today. Every resident of that ecosystem – from patients to pharmacists to physicians to insurers – was managing shifting landscapes well before the rollout of the Affordable Care Act. Now, the pace of change is accelerating.

To serve at the helm of a vessel in such roiling waters takes a steady hand, a wealth of experience and an eye for solving fiscal problems strategically. One such exemplary captain is John “Jack” Sutherland III, CFO of the Care New England Health System.

“I love the challenge of this industry,” Sutherland said, speaking of what keeps him going from day to day, year to year, decade to decade. “The not-for-profit health care industry is not your typical business field. You start with supporting the mission of the organization, which relates to the health and well-being of the community, so it’s a part of the business to be thinking about on a daily basis. And then to be able to wrap it into the challenges of the current [health care] environment … the evolution of the industry … it’s very satisfying to see the successes of what we’ve been able to deliver.”

Sutherland has been with the organization for nearly 30 years, eight in his current post as senior vice president, finance/chief financial officer. Care New England employs 8,200 people and had annual gross revenue of $893 million for the fiscal year that ended last September.

During Sutherland’s tenure, according to information provided by President and CEO Dennis D. Keefe, the hospital system has achieved positive operating margins in all but three of those years. These results are enviable for any business, but are particularly laudable in the health care industry, especially in Rhode Island, where fiscal mayhem is not uncommon.

“I would say that’s been Jack’s greatest strength – the fact that with all the challenges in this environment, he still found a way, working with the organization, to keep that steady course and have a positive operating performance. And that allows you to do so many things. You can reinvest in employees, the staff, programs and services, improving the health care delivery system,” said Keefe. “I’m confident in our future because of Jack.”

Doug Jacobs, a board member and chairman of the finance committee, echoed Keefe’s sentiments, calling Care New England a “highly complex and constantly evolving organization.”

“Jack has been CNE’s key financial leader to enable such change and has worked successfully to make the necessary investments and efficiencies happen,” said Jacobs.

It would seem that Sutherland’s ability to succeed in his post is a complex secret sauce. But a common ingredient quickly emerges in Sutherland’s philosophy and career, and that is a desire for knowledge. He built an educational foundation that combined economic strategy and broad thinking, owing to his experience with the liberal arts at Middlebury College, with an aptitude for numbers, boosted by a master’s degree in accounting and an MBA. Further education entailed his attending law school at Roger Williams at night while working for Care New England. He did so because he understood that fluency in law would be essential for his work in the health care field.

Sutherland ultimately credits his – and Care New England’s – successes with support from his colleagues at Care New England.

“You need to rely on the people and systems that you build underneath you. It’s a credit to the entire team that I’m being acknowledged in this way. There’s no way I would be here if I didn’t have that kind of support,” he said.

The confidence in his team and his farsighted strategy were revealed in a successful tactical move Sutherland made: taking the finance department from a traditional back-office function to one that was more integrated into the organization.

Sutherland said when he started working at Women & Infants Hospital, “the accountants of my department were off-site and there was somewhat of a lack of engagement and understanding of the business of health care. … They could calculate budget variances but weren’t engaged in understanding why those variances were there. What I was able to accomplish was having the various accountants take more ownership.”

Senior Vice President Domenic F. Delmonico, who began his working relationship with Sutherland in the late 1970s when both men were at KPMG Peat Marwick, said that this sort of thinking makes Sutherland not just a good CFO, but an “exceptional” one.

“He’s bright and exceptional with numbers, but he brings the broader perspective that makes him a very valuable member of the executive leadership team,” said Delmonico. He further added that Sutherland’s even temper in tense situations, always peppered with a sense of humor, makes him an always approachable and forever invaluable colleague.

In addition to integrating the finance department into the larger whole, Sutherland’s other notable contributions have included the development of “system strength initiatives” – a checklist of performance and financial metrics. These fold into other initiatives across the organization that leaders are responsible for, and are meant to “keep focus on key elements,” he said.

On Sutherland’s end, for example, the strengthening of the organization’s balance sheet led to a better alignment of “the organization’s financial-statement ratios with the health-system indices across the bond-rating agency prospectus.”

Within a more fluid set of responsibilities, Sutherland has also been tapped as a key member of Care New England’s strategic partnership SWAT team.

“[He] spearheads the due diligence that is required as we contemplate or effect new organizational partnerships,” said Keefe. “In the past year alone, we have engaged in new affiliations with Memorial Hospital of Rhode Island, Rhode Island Primary Care Physicians Corporation, The Providence Center and a new partnership with Blue Cross & Blue Shield of Rhode Island.”

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